And uh we will move into the uh uh the our the Rochester Economic Development Authority uh Clerk Casel.

Can you call the role?

It's on my list here.

We don't usually do that, but here it is.

We don't need to sorry if we can on that.

Uh okay.

We will then move on to uh our consent agenda, and uh we have two items on the consent agenda, which is the uh the EDA uh minutes of September 22nd and a decertification of tax increment financing district number 51 50-1 loss at Mayo Park.

Uh is there a motion to accept the consent agenda correct by council member uh Palmer, seconded by council member Fredericks a question by uh council member Wall.

So I I take this uh to mean that this is a celebratory night that uh the this uh building then becomes uh uh fully taxable uh for the citizens of Rochester, correct?

It hasn't fully taxable, it's just that we're back in the income and a city's obligation, correct?

Yes, yep.

So it's a great great day.

Yeah, great day to celebrate.

Thanks for pointing that out, Councilmember Wall.

Uh all in favor of uh passing the consent agenda, say aye.

Aye opposed, say nay.

Motion passes.

Uh we have one public hearing on our agenda, which is establishing uh development district number 87 and tax increment financing district number 87 uh point one interfund loan and entering into a development assistant agreement with Build Wealth Minc.

Mr.

Sveny.

Yep, good evening, EDU president, PD members, Mayor Norton, Brent Smithy Community Development Direct or Community Development Department.

Um tonight we're here asking for the establishment of tax increment financing district 87 1, known as London Brook.

Um this is the same property that Ms.

Edens talked about with the council earlier this evening on the homeowner creationship program.

Um this is just kind of showing some renderings that were included in their TIFF application.

Basically, there's 42 um triplex buildings, each portion of the houses on a separate lot, and then there's eight um twin homes.

The picture is the lot before the trees were taken down earlier this year, and then the picture on the right is just the district of the tax increment financing district.

Uh Miss Edens kind of went over the um project details in her presentation.

Basically, the developer here is Build Wealth Minnesota.

It's located along the east side of 16th Avenue, south of 8.5 street, and north of 10th Street.

Um the tax financing portion is on 50 for sale single family dwellings.

Um and then she also mentioned the overall development also has a 12 unit apartment building and also a daycare center.

The timeline for the development would be starting in November of this year and having all the homes completed by um November 2027.

So this is a um housing TIFF district.

Um typically when we bring housing TIFF districts before the EDA and council, it is for a um rental project, um, mostly um apartment buildings.

In this case, this is a housing TIF district for a single family development.

The council did approve a TIF district on the single family development last year for the pretty rich development.

Um current estimated property value is around $53,000.

Um upon completion of the 50 homes, they'll have a value of over 17 million dollars.

So with a a TIFF district for single family housing, um, they are limited to income restrictions.

Basically, if it's a household of one or two individuals, the um household has to be at or below 110% of the area meaning income for household of three or more, they have to have an income at below 115% of area median income.

So in this case, when the home is built and sold to an income qualified buyer, the city would provide the the developer 20,000 worth of assistance.

Basically, that's taking the help helping lower that cost of the home to the income buyer.

Um in this case, the project is also getting a loan from the housing coalition as part of that loan with the housing coalition.

No home here can be sold for more than $350,000.

But in regards to TIFF, they would still have to income certify the purchaser of the home so we can ensure that they meet the state statute requirements of either 100% AMI or 115% AMI for the buyers.

In this case, we would be looking to borrow from the EV funding.

Um and then we would collect increment over potentially six to seven years to pay ourselves back that increment.

So the developer isn't getting the full million dollars up front.

It is when the home is built, constructed, and sold to an income qualified buyer.

So the most the the most amount of assistance being offered here is a million dollars, assuming that they fine um uh that all 50 homes are sold to income qualified buyers.

So if the home is not sold to the income qualified buyer, they would not get that 20,000.

Some of the benefits is it's providing um 50 affordable single family housing units that are for sale.

Um expands the available housing options within the city, it's an in-field development that lot's been pretty sitting like that for a long time.

So it infills um development on that lot.

So the action before the council that before the EDA this evening asking to approve a resolution that establishes tax increment financing district number 87, housing tax increment financing district number 87-1 and plan authorizing the the interloan fund and authorizing the execution of a development assistance agreement with build wealth Minnesota for tax increment financing number 87-1.

I will let you know that I did receive an email from the developer late this afternoon that has could not make it to the meeting this evening.

He is from the Twin Cities as well.

His wife was ill, so he's not able to make it to the meeting this evening.

Thank you for share sharing that.

Uh uh, this is a public hearing.

Anyone wishing to be heard on this item, please step forward.

Anyone wishing to be heard on this item, please step forward.

Are you guys laughing at me?

Anyone wishing to be heard on this item, please step forward.

All uh I will close the public hearing and invite Mr.

Svenbee back up to the microphone.

Uh questions.

Uh council member uh uh Fredericks Fredericks was first.

Thank you, President Schubring.

Um, just for the public record, what is currently the hundred per what is the number?

100% medium income.

I should have brought this with me, but I'll ask Miss Edens if she has it off her memory.

But um your question was what's 100% of the area median income?

What is the median income right now in the city limits of Rochester?

Uh I think for a family of two, I think it's 105,000.

I don't know.

That's right.

We typically are adjusting it based on household size.

So if you're looking at the region, it's going to be lower than 102, but that sounds right for a household size of two.

So can confirm that.

So basically what I'm hearing you say is to qualify for the incentives, the household income for a couple correct will be 105,000 or lower, or just two people live.

Whatever that is.

Well, if this isn't a next year, now they'll they'll have different numbers for increasingly could be 107%, wherever that is.

They'll have to meet an income qualification.

I was just curious.

Yep.

Councilmember Miller.

So to try to simplify the two actions before is the one we've already taken in this one.

The two together would provide up to 40,000 per house built.

Right, 20,000.

Correct.

Per.

Yeah.

This one only applies if the buyer qualifies under the AMI requirements.

Correct.

The first one requires the house not be sold over 350,000.

Right.

So is the house price capped whether we adopt this or not?

If they were to receive that first already approved.

This is this is separate because this is taxing financing.

This is based off of strictly off income.

Totally understand.

So the the first and item that we already approved that Messidens presented from the economic vitality fund caps the price of the home.

And it looks like Messidens.

It's not at 350, it's at 452 or something like that, I believe.

Go ahead.

If I may, that's correct.

Uh but I guess I would say that because they're receiving, and this has already been approved and no interest loan from the coalition, it's capped at 350,000.

Thank you.

So it is capped, different program.

And then from the economic vitality fund, if we take both actions, two million dollars comes out, one million is repaid through this TIFF.

Correct.

Okay.

Yeah.

With interest with enters.

Thank you.

Count Council Member Palmer.

Thank you.

Um family of four, we were standing to the note 125,600 would be their upper income level that they would have to have.

Um if I remember correctly, we used TIFF for residential housing back in the 90s with um Rose Harbor and a couple other ones.

Is that correct?

Do you remember that?

Late 90s, early 2000s, correct?

Okay.

And those are all been successful, and those homeowners are there paying full vote.

In the state law is that the most that they can go to is 110% of the of the of the AMI.

Is that correct?

It's for family of one or two, it's 100%.

Family of three or more, it's 115%.

100%.

State in state statute, correct?

Okay.

And um again, you know, this project has a um daycare that's that they're planning, which we're not financing, is that correct?

Yep.

Okay, thank you.

Councilmember Keene.

I again I just want to make sure.

Usually I think of TIFF as um the person who's paying the taxes is the one who's getting the increment back, and that's how it becomes a TIFF.

That's how the TIFF district is.

This has some a developer getting the benefit and a different person paying the um paying the taxes.

So I want to make sure I understand that we have like the protections in place.

Um house is built, and then the price is set, and is that and which one of there's a bill buyer that we pay the 20,000?

Or when is it that we pay the 20,000?

So is it for sale?

Uh at what point in the process does he get the does the city write a check?

Once the once he provides the city with documentation that an income buyer or yeah, income purchaser has qualified to purchase that home and it's buying the home.

Okay, and that individual 20K then is coming from that exact address, or is it coming from the community?

Well, we'll be able to collect the increment off the whole development.

Well, that's those 50 lots.

So once we get to the point where we've we paid ourselves a million dollars, assuming that all 50 homes are sold to qualified buyers.

Once we get to the point where we collected a million dollars of increment plus interest, our obligations will be matched and we can be certified the TIFF district.

My question was slightly different.

Is it like so the individual homes don't pay back to the individual increment isn't coming from the individual homes, it's coming from the old overall community.

What's coming off of the 50 lots within the development?

Let me try it again.

Is it correct?

It is coming off each individual house.

Uh uh to the exact dollar amount, or is it like if one thing gets paid off first, they just keep paying the increment until the whole million is paid, or do they stop?

No, we'll collect increment on all 50 lots until we get to that one million dollars of assistance that we're providing.

So if one house is if one house is sold much later, correct.

Yeah, so it isn't an individual, it's not 50 different no, it's one tip different.

It's the district, one tip collecting the increment on all 50 lots.

So I I just want to make sure that there's no like bad behavior here that you you could qualify to sell it at this point, and we give you the money, but then they don't sell it at that point, they there's a change in the plan.

I I'm just trying to protect the city from what it what is the controls because in the normal TIFF, it's like if you don't pay your taxes, you don't get an increment back.

And this one sounds like it's not we don't have that level of control.

No, we well, we do because we're collecting the increment off all 50 okay houses within that development.

So if some house is sit there for a couple years with no buyers, we're still collecting increment off all those units, yeah, paying ourselves back until we reach that million dollar mark, assuming that we still this is the example I'm thinking of or the bad situation that if this thing stretched out to take 10 years to build 50 houses because there's some downturn or something.

Do we still we haven't given out the million because we don't give it until the house is coming up for sale?

Correct.

And then we collect until we get to the point of this is how much we've given out, and then we stop again.

Correct.

We are protected, we're not gonna give out more and then not be able to collect it.

Correct.

Okay.

Um we only have 25 years to collect that increment, but like I said, based on the home valuations, we should collect if each house was let's say we each house is built all at one time.

All at one time.

Everyone moved in at the same time.

We should collect increment back within six to seven years.

And can you clarify when you say the increment?

They're they'll pay their taxes, but does the uh taxes as uh county, city, and school district.

Does the city collect all three of those for the just till we get the increment?

Correct.

Yeah, the county collects it for us and sends it over to the finance department.

Collects all three groups three groups, right?

Yeah, yeah.

Um, and I'm again same thing with the timing of that.

Does I want to make sure we don't end up getting making an agreement here that we end up having financial trouble with, but um, it is the the amount of money that we have extended when we collect that we'll stop collecting until we give out more money.

I I see that your staff is or the staff is agreeing uh Miss Woodward.

I just want to clarify that there the funding for each of the up to the 20,000 isn't being released until that home is sold.

So the protection is is like until there is a buyer and it's ready to be sold.

That 20,000 is not released.

All right, good.

And so that we're making sure that they have been uh verified with their income and it is ready to go, and then that already goes.

So that's the protection then that there is that it becomes uh a taxpayer.

Correct.

Okay.

No, I I think I maybe I got it wrong, but yeah, I I had I had it wrong that I was just worried that we're gonna get ahead of ourselves.

Um all right, no, that that makes me feel better.

Thank you.

Uh council member Wall.

Maybe asking that question in a little bit different way.

Uh buyer A uh gets a home in 2027 and pays a thousand dollars in taxes.

It doesn't make any difference if it's going to pay us back or if the TIFF project is done, it's still gonna be the same amount of taxes.

Yep, correct.

They're gonna they're gonna write the same check.

Correct.

Yeah, yeah.

Uh councilmember Doring.

I'd like to make a motion to adopt a resolution approving economic development district number 87 housing tax increment financing district number 87-1 and plan authorizing an inver interfund loan and authorizing execution of a development assistant agreement with Build Wealth Minnesota Incorporated for tax increment financing district number 87-1.

Motion made by council member Doring, seconded by council member Fredericks.

And uh council member Doring, any more to add?

Nope.

Uh any further discussion?

All in favor say aye.

Aye.

Aye.

All opposed, say nay.

Motion passes.

We will uh now uh motion to adjourn uh the EDE.

So move move move by council member Fredericks and seconded by council member wall.

All in favor say aye.

Aye, opposed, say nay.

We are